Time to Book Profits in Retail Stocks

Two data releases due out this week could give investors an opportunity to book profits in retail stocks.

NEW YORK ( TheStreet) -- Two important pieces of economic data due out this week could drive retail stocks.

On Tuesday, the Conference Board plans to release its Consumer Confidence index for August, and it's expected to increase slightly, to 67.0. Keep in mind that a neutral reading for confidence is between 90 and 120.

On Thursday, we'll get the latest readings on personal income and spending. Both are expected to increase by 0.4%.

I view strength in retail stocks as an opportunity to book profits, as my Web site, www.ValuEngine.com, shows that Consumer Staples stocks are 9.1% overvalued, while Retail-Wholesale stocks are 4.6% overvalued.

Today I am profiling the 28 stocks in the S&P Retail Index (^RLX). I am looking for opportunities to book profits on retail stocks trading near multiyear highs or all-time highs.

The daily chart for the RLX (644.98) (first chart below) shows an overbought condition, with the 12x3x3 daily slow stochastic reading at 83.42. The index is above its 21-day, 50-day and 200-day simple moving averages at 630.80, 819.80 and 587.87, respectively.

The weekly chart for RLX (644.98) (second chart below) shows a rising momentum (12x3x3 weekly slow stochastic) reading at 72.84. Weekly closes above the five-week modified moving average at 628.68 keeps the weekly chart profile positive. Major support is the 200-week simple moving average at 454.53.

Reading the Table

OV/UN Valued: The stocks with a red number are undervalued by this percentage, while those with a black number are overvalued by that percentage, according to ValuEngine.

VE Rating: A "1-Engine" rating is a Strong Sell, a "2-Engine" rating is a Sell, a "3-Engine" rating is a Hold, a "4-Engine" rating is a Buy and a "5-Engine" rating is a Strong Buy.

Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.

Forecast One-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.